Management and Organizational Studies 2285 Lecture Notes - Lecture 2: Concentration Ratio, Vertical Integration, Product Differentiation
Document Summary
Comparative advantage is relative what is a benefit to one firm may not be a benefit to another: ex. Swiss are known for excellence in watch-making this is no benefit to car manufacturer. Firms must understand how to determine relative comparative advantage. Relative comparative advantage: the fit between firm needs and what the country offers which can differ depending on each. Internationalization can take the form of a lot of different operations. What the firm needs depends upon why it is going, but more importantly, what is going to do there. Fir comes from being able to get what the firm needs to do what it does from a given country. Structure can be influenced by the cost to operate in given industry: high costs generally lead to monopoly, low to competitive. Structure influences firm behaviour in terms of pricing and product differentiation.